Key Ideas Concentration Specialties - ABC Real Estate School

1 NRS 645 and NAC 645 abc real estate school Nevada Law Nov 2009 Page 207 Key Ideas Concentration Specialties : Additional permits that can be added to a real Estate license: Property Management Permit If a licensee chooses to pursue an occupation as a property manager, they will need to add a property management permit to their real Estate license. This is not designed for leasing agents, only licensees that will be doing on-going property management. It requires licensees to complete 24 classroom hours of education and take an exam contracted by the state. The office of this permit holder needs a designee that is in charge of the permit holders. This person could be the broker or a broker salesperson with 2 years experience. The Division approves them. To apply for a permit, the licensee takes 24-hours live classroom and takes a state-sponsored test.

2 Three hours continuing education is required to renew the permit. Business Brokerage Permit The only other specialty area that requires an additional permit is business brokerage. The procedure for obtaining this permit is similar to that of the property management permit. Licensees need to complete 24-hours of Business Brokerage pre-licensing education and pass a test given by PSI. Three hours of continuing education is required to renew the permit. NRS 645 and NAC 645 abc real estate school Nevada Law Nov 2009 Page 208 Business broker means a person who, while acting as a real Estate broker, real Estate broker-salesman or real Estate salesman for another and for compensation or with the intention or expectation of receiving compensation: 1. Sells, exchanges, options or purchases a business; 2.

3 Negotiates or offers, attempts or agrees to negotiate the sale, exchange, option or purchase of a business; or 3. Lists or solicits prospective purchasers of a business. A business broker must obtain a permit in addition to their real Estate license. Pre-licensing education consists of 24 hours of classroom-only (may change to any method check if interested) instruction. A test given by the state must be passed. A designee must be named. This designee can either be the broker of record or a business broker approved The business broker must take 3-hours on continuing education to renew the permit. What business transactions do not need to be handled by a business broker permit holder? At Nevada Commission meetings that addressed the business brokerage regulations, the Commissioners and interested parties found it challenging to distinguish between types of businesses that should be covered and those that should be exempt from coverage by the new business brokerage permit legislation and regulations.

4 The intent of this regulation was to exclude businesses that would not have value if they were not transferred with the real property. These final exemptions can be found in NAC 645, in the definition of an existing enterprise . Per the emergency regulation, they include the following: The sales of real property concurrently with a related business where more than 50% of the income stream from the related business is directly derived from the use of that particular property, including but not limited to: o Tenant occupancy transfers of lease and/or management agreements, o Storage facilities, o Hotels, o Motels, o Ranches, and/or o Other businesses that would have no value without a concurrent transfer of the real property NRS 645 and NAC 645 abc real estate school Nevada Law Nov 2009 Page 209 Supporting Law/Code: NRS Business broker defined.

5 Business broker means a person who, while acting as a real Estate broker, real Estate broker-salesman or real Estate salesman for another and for compensation or with the intention or expectation of receiving compensation: 1. Sells, exchanges, options or purchases a business; 2. Negotiates or offers, attempts or agrees to negotiate the sale, exchange, option or purchase of a business; or 3. Lists or solicits prospective purchasers of a business. NRS "Business" defined. "Business" means the tangible assets and goodwill of an existing enterprise. NRS Permit to engage in business as business broker: Persons eligible; requirements; continuing education; expiration; renewal; regulations. 1. A person who is licensed as a real Estate broker, real Estate broker-salesman or real Estate salesman pursuant to this chapter may apply to the real Estate Division for a permit to engage in business as a business broker.

6 2. An applicant for a permit must: (a) Provide proof satisfactory to the real Estate Division that he has successfully completed at least 24 hours of instruction relating to business brokerage; and (b) Comply with any other requirements for the issuance of a permit established by the Commission. 3. A permit expires on the same date as the license of the holder of the permit expires. A permit may be renewed at the time that a person licensed pursuant to this chapter applies for renewal of his license. 4. An applicant for the renewal of a permit must: (a) Provide proof satisfactory to the real Estate Division that he has successfully completed at least 3 hours of continuing education required for the renewal of his license pursuant to the regulations adopted by the Commission pursuant to NRS in an approved educational course, seminar or conference relating to business brokerage.

7 (b) Comply with any other requirements for renewal of a permit established by the Commission. 5. The Commission shall adopt such regulations as are necessary to carry out the provisions of this section. The regulations must include, without limitation, provisions that establish: (a) Requirements for the issuance or renewal of a permit. (b) Fees for: (1) The issuance or renewal of a permit; (2) The cost of any examination required of an applicant for a permit, including, without limitation, any costs which are necessary for the administration of an examination; and (3) The cost of any investigation of an applicant for a permit. (c) Standards of education for the approval of a course of instruction to qualify an applicant for the issuance or NRS Designated business brokers: Requirements; qualifications; duties. 1. If a real Estate broker does not hold a permit to engage in business as a business broker but intends to have the activities of a business broker conducted at an office, the real Estate broker must: (a) Appoint a person, who has the qualifications required by this section, as the designated business broker for the office to supervise the activities of a business broker conducted at the office; and (b) Submit notice of the appointment to the Division.

8 2. The designated business broker for an office must be a natural person who: (a) Holds a license as a real Estate broker or real Estate broker-salesman; (b) Holds a permit to engage in business as a business broker; and (c) Has 2 years active experience, within the 4 years immediately preceding the date of the appointment, in conducting the activities of a business broker in the United States as a licensed real Estate broker, real Estate broker-salesman or real Estate salesman. 3. While acting as the designated business broker for an office, the person: (a) Must comply with all applicable provisions of this chapter; and (b) Is subject to all the remedies and penalties provided for in this chapter. NRS 645 and NAC 645 abc real estate school Nevada Law Nov 2009 Page 210 Property Management Permit Property Management Law: o Not just leasing on-going property management.

9 O Trust account: Property management offices need a trust account. The Broker must keep trust account records for 5 years after the last activity. A permit-holder Broker-salesperson may sign trust account checks with their broker s written permission. o Designated property manager: Every property management office needs a Designee a manager for the property managers. The Designated property manager can be the broker if they have a permit - or a Broker salesperson with 2 years experience. The Division must be notified of the identity of the designated property manager. Within 5 days of a designated property manager s termination, the broker needs to request a trust account statement from the bank. The broker needs to reconcile the trust account and submit a form to the Division within 15 days of the designee s termination. o Property Management Permits: In addition to a real Estate license, property managers must also have a property management permit attached to their real Estate license.

10 Permit holders can be salespeople, broker-salespeople or brokers. 24 classroom hours is required for the permit. 3 hours property management continuing education is required to renew the permit. The permit period runs concurrent with the real Estate license. A state examination is required to obtain a permit. o Property Management Agreements must include: A defined term and renewal provisions. Criteria for treatment of tenants deposits. Broker fee. Broker s agency limits. Clear cancellation provisions. o Trust Account regulations: Property managers must maintain 2 separate trust accounts; one for security deposits and one for activities relating to rental activities Business Brokerage Permit Business Brokerage Permit: o Licensees complete 24 hours of business brokerage education. o Licensees pass a state exam. o 3 hours continuing education is required to renew the business brokerage permit.